Should You Consider a Roth IRA Conversion?

More and more Americans taking advantage ofaccount than previously because the markets still
the retirement benefits of a Roth IRA conversion,haven't recovered fully. Further, many people also
but the truth is that converting your currenthave found that their taxable income as a whole
individual retirement account into a Roth IRA isn'tis down this year, too, because of the economic
right for everyone. A Roth IRA is a retirementsituation. So for many people, now is the perfect
account that does require you to pay taxes ontime to do a Roth IRA conversion.
the income in the year it was earned, but youThis conversion, however, is not right for all
won't pay taxes again on it later when youpeople. If you will need access to your retirement
withdrawal the funds in retirement. Nor will youfunds before age 70 ½, this is not the right
pay taxes on any growth your retirement fundstype of retirement account for you. Also, if you
enjoy between now and the time you withdrawalhave been one of the lucky few who haven't
them. There are some unique rules for a ROTHseen a significant drop in your retirement balances
account, though. For instance, unlike with otheror in your personal income for this year, you
retirement accounts, you cannot withdraw theshould discuss the benefits of a conversion with
funds from your account without penalty until youyour financial adviser to ensure this is the most
reach the age of 70 ½.cost-effective strategy for you. Many people are
When you do a Roth IRA conversion, you will paytaking advantage of the benefits of a Roth IRA
taxes on the amount being rolled into the newconversion, and now is the perfect time for you
account. However, many people currently areto look into this option and see if it is right for
carrying lower balances on their retirementyou.